Hillenbrand Inc

Greetings. Welcome to Hill & Brand's second quarter fiscal year 2023 earnings call. At this time, all participants are in listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note, this conference is being recorded. At this time, I'll turn the conference over to Sam Meisner, Vice President, Investor Relations. Sam, you may now begin.

Thank you, Operator, and good morning, everyone. Welcome to Hill & Brand's conference call for our fiscal second quarter of 2023. I'm joined by our President and CEO, Kim Ryan, and our Senior Vice President and CFO, Bob VanHembergen. I'd like to direct your attention to the supplemental slides posted on our IR website that will be referenced on today's call. As a reminder, the divested basal segment is classified as discontinued operations for all periods presented, and our commentary will be based on the performance of our continuing operations. Turning to slide three, a reminder that our comments may contain certain forward-looking statements that are subject to the safe harbor provisions of the securities laws. These statements are not guarantees of future performance, and our actual results could differ materially. Also, during the course of this call, we will be discussing certain non-GAAP operating performance measures, including organic comparisons for our segments, which exclude the impacts of acquisitions, divestitures, and foreign currency exchange. I encourage you to review the appendix and slide three of the presentation, as well as our 10-Q, which can be found on our website, for a deeper discussion of non-GAAP information, forward-looking statements, and the risk factors that could impact our actual results. With that, I'll turn the call over to Kim. Kim?

Thank you, Sam, and good morning, everyone. Thank you for joining us today. With the previously announced completion of our Batesville divestiture in February, we have significantly transformed our organization to be focused on delivering highly engineered, mission-critical industrial processing solutions into end markets that are underpinned by long-term secular growth trends. As you know, our primary focus is on the end markets of durable plastics, recycling, and food. At the core of these markets is a common foundation of material processing requirements, that allow us to leverage our strengths across the enterprise, and where the expanding global middle class and an increased focus on sustainable solutions are key factors driving demand for both increased quantity and quality of products that can be produced on our equipment. Over the past year, we've acquired additional capabilities, and by combining them with our existing Coperion technologies, we've enhanced the breadth of our unique end-to-end solutions. We're making good progress on integrating these acquisitions, and we continue to identify opportunities to leverage our complementary technologies, leading brands, and deep applications expertise to provide superior benefits for our customers and long-term value for our shareholders. Now I'll provide a summary of our performance and an update on the overall demand environment. I'm pleased with our performance this quarter as we delivered strong revenue growth, and earnings per share that exceeded the high end of our guidance. I'm very proud of the way our associates have continued to execute our strategy as they navigate a dynamic macro environment. I'm truly grateful for the hard work of our over 9,000 employees around the world to shape what matters for tomorrow. Consolidated revenue for the quarter grew 22%, primarily driven by our contributions from our recent acquisitions and robust organic growth in our APS segments. We continued to see strong order performance within APS, including record orders for aftermarket parts and service, and we were encouraged by sequential order improvement within MTS, leading to another quarter of record total backlog. I'll now spend a moment providing more detail on what we're seeing across our end markets. Overall, the demand pipeline remains healthy across APS, and with MTS, we are seeing signs of improvement. That said, we continue to experience a cautious approach by some customers as the timing of investment decisions remained extended throughout the quarter. Let's begin with the MTS segment. We saw a sequential improvement in orders, revenue, and margin in the quarter with a record level of revenue from our injection molding product line as the teams did a great job of executing products from the backlog. But as anticipated, orders remained soft across the segments. particularly for our higher margin hot runner equipment. We continue to see customer decision delays across key end markets and geographies. Border pipelines are improving, and we do expect to return to a more normal demand environment as we move through the back half of the fiscal year. Along with that, we also expect to see a pickup in margins due to more favorable product mix as demand for hot runners improves over the next two quarters. Now on to APS. Let's start where we've made our most recent investments. First, with food. The order pipeline for new equipment is at a record level, with strong demand outlook for North America and Europe, particularly in the areas of baked goods and pet food. While we did see some customer decision delays in the quarter, we continue to focus the business on pipeline development. The integration of Linksys, Peerless, and Gobbler remains on track, and we continue to identify opportunities with customers to sell solutions that leverage the capabilities of our extended product portfolio. Turning to recycling. With the combination of our coperion extrusion and material handling systems and our recently acquired Herbal Shredding, Washing, and Grinding equipment, we are in a unique position to provide complete plastics recycling solutions. The exceptional receptivity from customers regarding the value we can provide continues to outpace expectations, and the pipeline of orders has grown rapidly. We are also starting to see the scale of these customer investments increase, particularly in Europe and North America, but we also expect to see strong demand in India and the Middle East over the quarters and years ahead. Our integration continues to progress as planned. And finally, our core growth platform of durable plastics within our APS segment. As we've communicated over the past few quarters, we continue to see a strong investment cycle for polyolefin and engineering plastics. Demand remains stable in China and India, and the Middle East remains an attractive region as well for growth, particularly for large polyolefin projects. The scale of these projects continues to increase as customers look to maximize the efficiency of their investment, and this plays to our strengths as a leading global provider of high output extrusion and material handling systems. We are also seeing strong demand for aftermarket parts and service, particularly in North America, which continues to indicate the critical need to support customers throughout the life of their equipment and systems. Overall for APS, we continue to see good demand across our key end markets, and we're further bolstered by our record backlog heading into the second half of the fiscal year, which gives us visibility and confidence in our outlook, as Bob will discuss in more detail later on the call. Moving forward, our teams are laser focused on deploying the Hillenbrand operating model to drive productivity in our operations and integrate our recent acquisitions while also aggressively managing discretionary costs over the near term. We remain confident in the foundation we've built to drive long-term profitable growth and shareholder value creation. I'll now turn the call over to Bob to provide a more detailed overview of our financial performance and outlook for the remainder of the year.